October 29, 2010

Verizon Fined $25M For Overcharging

After receiving a hefty $25 million fine from the Federal Communications Commission, Verizon Wireless has agreed to pay at least $52.8 million in refunds to customers who inadvertently racked up data charges on their phones over the past three years, the FCC said Thursday.

The fine by the FCC is the largest in the agency's 76-year history, said chairman Julius Genachowski in a statement.

"People shouldn't find mystery fees when they open their phone bills and they certainly shouldn't have to pay for services they didn't want and didn't use," Genachowski said.

To avert action by the FCC, Verizon Wireless said earlier this month that it would issue refunds to about 15 million subscribers. The company declined to give a total value for the refunds, but most customers would receive between two and six dollars in refunds.

Verizon said in a statement that the settlement was voluntary and it apologized for the "accidental data charges."

The FCC began asking Verizon Wireless last year about $1.99-per-megabyte data access fees that showed up on the bills of millions of customers who didn't have data plans. Subscribers would receive the charges when they initiated data or Web access by accidentally pressing a button on their phones.

After Cleveland's main newspaper, the Plain Dealer, raised awareness of the fees, Verizon Wireless said last year it would take action to prevent the charges from appearing on subscriber bills and issue refunds to customers who complained.

The FCC said it would check to see if Verizon Wireless issued refunds it had agreed to.


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